Consumers Go for Bad Idea and Buy Food in Tire Stores
In a story/discussion back in October 2008, RetailWire looked
at Canadian Tire’s plans to test food sales at two stores in Ottawa. In a poll
on the site, respondents were asked, “How difficult is it for a retailer not
in the food business to succeed at selling groceries?” Three out of four respondents
said it was very or somewhat difficult for a merchant new to the business to
It appears as though Canadian Tire is beating the RetailWire poll’s
odds as the chain has expanded food sales to nine “Smart” format stores and
reports consumers up north have no problem buying food from the same place
they buy home improvement products and tires.
Arnett, president of Canadian Tire Retail, told the Financial Post
that the chain has seen a difference between what people say in market research
and how they behave in stores.
"Typically people will say, ‘No, I don’t think
that’s a very good idea’, " he said. "When they see it, it’s different."
interestingly enough, is the most-shopped category in the store in the stores
that have food," Mr. Arnett told the Financial Post, "because
everybody needs food; not everybody needs plumbing on a given trip."
advantage to adding food to the mix is it creates more frequent shopping trips
to Canadian Tire’s stores and they often buy general merchandise items, as
While the test has been a success, with Smart stores achieving significant
sales increases, Canadian Tire has not decided whether to roll out food to
its 479 stores.
Discussion Questions: What challenges will Canadian Tire
face if it significantly ramps up its food operations to offer groceries
in all its 479 stores? What will it need to do if it wants to become a grocery
powerhouse in Canada?